Sex.com Takes Aim at Registrar

Joanna Glasner
08.14.02

The owner of the website Sex.com tried to convince a court Tuesday that the largest U.S. domain-name registry should be held accountable for an error that put the valuable Internet address in the hands of a con artist.

In a hearing before a federal appeals court panel in San Francisco, lawyers representing Sex.com argued that Network Solutions, a division of VeriSign, which runs the central database for the dot-com addresses, committed a breach of contract when it failed to verify a forged request to transfer the domain with its owner, Gary Kremen.

"This all could have been prevented with a simple call or e-mail to Mr. Kremen saying: Did you authorize this?" said James Wagstaffe, the attorney for Kremen, who is seeking monetary damages.

Instead, the saga of Sex.com has mushroomed into one of the most drawn-out court battles in the short history of the Internet, with Tuesday's courtroom drama marking the latest chapter in a seemingly never-ending dispute.

For Kremen, Tuesday's hearing provided a second attempt at a court judgment against Network Solutions for bungling the Sex.com transfer.

Kremen lost the first case. A federal judge in San Jose, California, ruled against the porn site operator, basing his decision in part on the fact that at the time Kremen registered the site, in 1994, domains were free. The judge contended that because Network Solutions was offered nothing of value in exchange for its efforts, it not should be held financially liable for its error.

The judge did hold the man who actually stole the domain, Steven Michael Cohen, liable to the tune of $65 million in largely uncollected damages. Cohen's attorneys were also in appellate court Tuesday, seeking to undo that ruling.

In the appellate hearing, Wagstaffe argued that even though Network Solutions didn't get money for registering the domain, it did get personal information about Kremen for its database. That, Wagstaffe said, should count as something of value. The company was also able to begin charging registrants shortly afterward, having developed its initial database of free registrations.

David Dolkas, the lawyer for Network Solutions, disagreed. Dolkas also rejected the argument from the Sex.com camp that a domain name's entry in Network Solutions central domain-name server, or DNS, constitutes proof of ownership of that Internet address.

"The DNS database is completely ownership neutral. It's just a translator," Dolkas said.

The judges for the Ninth Circuit Court of Appeals who heard Tuesday's arguments are unlikely to issue a decision for several weeks. Both Kremen and Dolkas, however, said they were encouraged by the judges' willingness to ask detailed questions during the hearing and to offer additional time for responses.

"The court knew the issues and gave it full consideration," Dolkas said.